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During the boom, companies had access to cheap credit, which increased the number of profitable projects they could fund.
Markets might have treated this as evidence of a lack of imagination, or a paucity of profitable projects.
Low interest rates have also played their part in keeping profits high, by reducing borrowing costs and by encouraging companies to use their spare cash to buy back stock, thereby increasing earnings per share.However, buying back shares suggests a certain lack of imagination on the part of chief executives, or a lack of profitable projects to back.
Plenty of profitable projects exist.
Similar(54)
To back the invoices, the managers falsely inflated the percentage of employees that it said were working on profitable projects, the bureau said.
To back the invoices, the managers falsely inflated the percentage of employees that it said were working "onsite," or on profitable projects, the bureau said.
This therefore means that the efficient allocation of credit to profitable projects has the potential of improving economic activities and subsequently economic growth.
China would happily produce a document that Mr. Xi could brag about at home, while accepting responsibility for only a carefully negotiated set of mutually profitable projects.
This would be tantamount to a European New Deal.One might counter that the EIB may simply be unable or unwilling to conjure up 'shovel-ready' projects to the tune of €300 billion annually, both because it is worried about its creditworthiness and due to a lack of potentially profitable projects.
The result is tens of thousands of tiny monopolies and many profitable projects that are never undertaken because of the high cost of borrowing.
PI shows the present value of benefits relative to the present value of costs; thus, the PI of a profitable project must be greater than one.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com